Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWSC 222

Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWSC 222

Glowbind Pty Ltd has not proved it is able to pay all debts as and when they become due and payable; the evidence does not support the inference of solvency, and immediate realisation of assets is neither intended nor assured in the ordinary course of business. The $1.3 million debt to the plaintiff cannot be paid immediately, and the lack of evidence as to cash resources or ability to borrow on the security of assets is fatal to the defendant's case. Accordingly, the company is insolvent under s.95A of the Corporations Law.

Jurisdiction
Australia
Judgment Date
27 March 2000
Procedural Posture
Corporate Insolvency Proceedings / Final Hearing of Summons for Winding Up
Outcome
Order winding up the defendant company and appointing a liquidator
Legal Topics
['winding Up' 'insolvency' 'cash Flow Test' 'statutory Demands' 'balance Sheet Approaches']
['corporations'] ['winding Up' 'insolvency' 'cash Flow Test' 'statutory Demands' 'balance Sheet Approaches']

Case Brief

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Procedural Posture

Corporate Insolvency Proceedings / Final Hearing of Summons for Winding Up

Legal Issues

  1. 1 ['Whether Glowbind Pty Ltd is insolvent within the meaning of Corporations Law s.95A' 'Whether a surplus of current assets over current liabilities is sufficient to infer solvency' 'Whether inability to pay debts due to temporary illiquidity amounts to insolvency']

Ratio Decidendi

Glowbind Pty Ltd has not proved it is able to pay all debts as and when they become due and payable; the evidence does not support the inference of solvency, and immediate realisation of assets is neither intended nor assured in the ordinary course of business. The $1.3 million debt to the plaintiff cannot be paid immediately, and the lack of evidence as to cash resources or ability to borrow on the security of assets is fatal to the defendant's case. Accordingly, the company is insolvent under s.95A of the Corporations Law.

Court Disposition

Order winding up the defendant company and appointing a liquidator

Orders

  • ['Glowbind Pty Ltd is wound up' 'Stephen James Parbery appointed as liquidator' 'Ordinary result as to costs to follow unless objected']